Some uses of simulation in econometrics Original Research Article

Simulation methods are now widely used in econometrics. The range of uses covers both the estimation of parameters in and the use of models. In this paper we discuss how simulation methods can be used to investigate some issues that have proven extremely difficult to handle analytically. Specifically, we consider how to measure the business cycle characteristics associated with macroeconomic models and how to estimate the parameters of a popular latent variables model.